I regular watch your videos nd i like it too much bcz u are teaching very Cleary nd simply that's why i want to do you 1 request plz make on veido case study. Topics are stock market company overall growth.
Dheeraj...pls educate and give inputs to arrive at ...appropriate discount ratea for discounting...given the central banks rates are moving up now...TIA....
Hi sir.🙂🙂 Recently I watched your ratio analysis tutorial. I have a doubt on it. Buyback is done in balance sheet but why not common stock portion dont reduced.
Assume you are 25 years old. You want to retire in 40 years with a retirement fund of $500,000. How much do you have to save each month if the interest rate is 2%? How was it calculated?
40 years from now, (at age 65). Here's the correct breakdown: Time Span: Since the person is currently 25 and wants to retire in 40 years, the time span is 40 years or 480 months Present Value of Future Savings Goal: The future value (FV) goal is $500,000, and we want to calculate the monthly contributions needed to reach this amount with an interest rate of 2% compounded monthly. Formula: The correct formula for calculating the monthly savings needed to reach a future amount is based on the Future Value of an Annuity formula: 𝑃𝑀𝑇=[ 𝐹𝑉 / { (1+𝑟/𝑛)^nt } - 1 ] * r/n To reach a retirement fund of $500,000 in 40 years with a 2% interest rate, you would need to save approximately $680.79 each month. This amount considers the compounding effect over 480 months. You said: why we're not using present value formula here ? ChatGPT said: Good question! The present value (PV) formula is used when we want to know the current value of a future sum, essentially telling us how much we would need to invest once today to reach a certain future value, assuming a specific interest rate. In this case, though, we're calculating ongoing monthly savings rather than a one-time investment. Here's why we use the Future Value of an Annuity (FVA) formula instead: Monthly Contributions: We’re assuming the person will save a fixed amount every month until retirement, rather than making a single upfront payment. Annuity formulas (like the one we used) calculate the future value of a series of regular payments, considering interest compounding. FVA Formula: The FVA formula is designed for calculating the future value when there’s a series of periodic payments (an annuity). It helps answer: “If I save a certain amount every month, how much will I have in the future?” Summary of when to use which formula: Present Value (PV): For a single, lump-sum investment today that will grow to a future amount. Future Value of an Annuity (FVA): For regular, periodic contributions (like monthly savings) that accumulate over time with compound interest.
Thank you... I cant believe I just watched a whole textbook chapter in 12 mins. This is great
Thank you for your kind words. :)
I found this video very helpful..I missed my class and came here and learned all the content of missed class.Thanks
You made it so easy to understand. Thank you!
Excellent video sir plzz make a video DCF model and what is terminal value
Excellent video! Thank you!
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Thanks, brilliant video!
Glad you liked it!
You made it make sense. Thank you!
I regular watch your videos nd i like it too much bcz u are teaching very Cleary nd simply that's why i want to do you 1 request plz make on veido case study. Topics are stock market company overall growth.
Thank you for the basic breakdowns of these concepts.
You are welcome :)
thank you! easy to understand. thank you for adding in-depth explanations and alternative formulas.
Glad we're on the same page, cheers!
thank you!! so well explained
Thank You
U r doing very good job ,,thanks a lot sir.
thank you very much, this video is simple and very helpfull for me
great dear. thanks
Fv/ PV explained very nicely.... kindly explain IRR/NPV/CAP RATE
Appreciate your feedback, more content coming soon!
Dheeraj...pls educate and give inputs to arrive at ...appropriate discount ratea for discounting...given the central banks rates are moving up now...TIA....
Keep those DCF examples coming. Money, real estate, etc. Thanks
Hi sir.🙂🙂
Recently I watched your ratio analysis tutorial.
I have a doubt on it.
Buyback is done in balance sheet but why not common stock portion dont reduced.
If the time is less than a year, how do we calculate future value?
Assume you are 25 years old. You want to retire in 40 years with a retirement fund of $500,000. How much do you have to save each month if the interest rate is 2%? How was it calculated?
40 years from now, (at age 65).
Here's the correct breakdown:
Time Span: Since the person is currently 25 and wants to retire in 40 years, the time span is 40 years or 480 months
Present Value of Future Savings Goal: The future value (FV) goal is $500,000, and we want to calculate the monthly contributions needed to reach this amount with an interest rate of 2% compounded monthly.
Formula: The correct formula for calculating the monthly savings needed to reach a future amount is based on the Future Value of an Annuity formula:
𝑃𝑀𝑇=[ 𝐹𝑉 / { (1+𝑟/𝑛)^nt } - 1 ] * r/n
To reach a retirement fund of $500,000 in 40 years with a 2% interest rate, you would need to save approximately $680.79 each month.
This amount considers the compounding effect over 480 months.
You said:
why we're not using present value formula here ?
ChatGPT said:
Good question! The present value (PV) formula is used when we want to know the current value of a future sum, essentially telling us how much we would need to invest once today to reach a certain future value, assuming a specific interest rate. In this case, though, we're calculating ongoing monthly savings rather than a one-time investment.
Here's why we use the Future Value of an Annuity (FVA) formula instead:
Monthly Contributions: We’re assuming the person will save a fixed amount every month until retirement, rather than making a single upfront payment. Annuity formulas (like the one we used) calculate the future value of a series of regular payments, considering interest compounding.
FVA Formula: The FVA formula is designed for calculating the future value when there’s a series of periodic payments (an annuity). It helps answer: “If I save a certain amount every month, how much will I have in the future?”
Summary of when to use which formula:
Present Value (PV): For a single, lump-sum investment today that will grow to a future amount.
Future Value of an Annuity (FVA): For regular, periodic contributions (like monthly savings) that accumulate over time with compound interest.